Personal Finance

Gift economies consist of situations were goods and services are exchanged without an expected or immediate return:TrueFalse True
Privately owned businesses are common in which type of economy?a. Gift economiesb. Planned economiesc. Socialist economiesd. Capitalist economies d. Capitalist economies
Which of the following is NOT an aspect of capitalism?a. Resources b. Cooperationc. Capitald. Labor b. Cooperation
While the economies of countries like the United States are generally considered capitalist, they are not pure market economies.TrueFalse True
When did economies begin?a. 1600b. 1850c. 1125d. Ancient times d. Ancient times
Market economies operate on the principle of supply and demand.TrueFalse True
What are taxes that are levied on imports and/or exports? a. Tariffsb. Capitalc. Free Enterprise Finesd. Excesses a. Tariffs
Capitalism is an example of a planned economyTrueFalse False
Individuals play what role in the economy?a. Minimalist b. Importantc. Randomd. They have no role. b. Important
Laissez-faire situations are characterized by a high degree of governmental involvement.TrueFalse False
What happens in one sector of the economy often affects other sectors of the economy.TrueFalse True
In the United States, which agency oversees workplace safety and ensures that businesses comply with safety and health regulations to protect workers and consumers?a. Department of Justiceb. Occupational Safety and Health Administrationc. National Institute of Healthd. Department of Natural Resources b. Occupational Safety and Health Administration
Tariffs are used to encourage global trade between two countries.TrueFalse False
Which of the following is NOT a characteristic of market economies?a. Competitionb. Economic Freedomc. Government ownership of businessesd. Economic Incentives c. Government ownership of businesses
What is the main characteristic of a laissez-faire economy?a. A highly active governmentb. An economy protected by organizations c. A lack of regulationsd. All of the above c. A lack of regulations
Societies did not develop monetary commodity systems until the mid-nineteenth century.TrueFalse False
Anti-trust laws or suits may be used to break up which of the following?a. Oligarchiesb. Polyismsc. Monopoliesd. Tariffs c. Monopolies
Capitalism is characterized by which of the following?a. Privately owned businessesb. Profitsc. A market economyd. All of the above d. All of the above
The Babylonians in Sumer used what as a monetary commodity?a. Yenb. Dimec. Shekeld. Arrayo c. Shekel
What are companies that have complete control over a particular product or industry?a. Monopoliesb. Oligarchiesc. Capitalistsd. All of the above a. Monopolies
In a pure market economy, the government controls most actions.TrueFalse False
In a capitalist system, what are the goods and tools that are used to make products?a. Capital b. Laborc. Synthetic resourcesd. None of the above a. Capital
The phrase laissez-faire means which of the following?a. To controlb. To let be c. To buyd. To contribute b. To let be
Individuals have little effect on the overall health of the economy.TrueFalse False
What is the study of the ways in which money is created and used in society?a. Sociologyb. Economics c. Political Scienced. Monitarism b. Economics
What is true about the stock market?a. Investors always make money from investing in the stock market.b. All stock markets feature physical location-based auctions of stocks.c. Even non-investors are influenced by the stock market. d. All of the above are true c. Even non-investors are influenced by the stock market.
Stock market crashes have relatively little effect on the overall economy.TrueFalse False
When talking about economic resources, capital refers to which of the following?a. Moneyb. Tools and machinery to manufacture goodsc. Investments and stocksd. All of the above b. Tools and machinery to manufacture goods
An economy where more money is being collected than is being allocated or spent is known as what type of economic stance?a. Expansionaryb. Contractionary c. Neutrald. Exceptionary b. Contractionary
“Free” items only cost the company that gives them awayTrueFalse False
While we talk about the stock market as if it were one big entity, the reality is that there are many stock markets around the world.True False True
Governments collect money through which of the following?a. Taxesb. Bondsc. Selling resourcesd. All of the above d. All of the above
In economic terms, marginal is another word for which of the following?a. Outsideb. Rarec. Additional d. Boundaries c. Additional
What is true about economic resources?a. Economic resources include only money.b. Economic resources are limited c. Economic resources exist only at the individual level.d. Economic resources are always controlled by the government. b. Economic resources are limited
Which of the following is an economic resource?a. Moneyb. Investmentsc. Entrepreneurial ability d. All of the above c. Entrepreneurial ability
What is a sort of auction for stocks in which traders verbally submit their offers?a. Open outcry b. Public caucusc. Verbal auctiond. Loud session a. Open outcry
In economic terms, “land” refers only to physical plots of ground.TrueFalse False
The NASDAQ features an open outcry.TrueFalse False
The difference between unlimited wants and limited resources affects both individuals and the economy.True False True
What is one economic principle?a. Resources are unlimited.b. Individuals have no rational self-interest.c. Resources are limited.d. The wants of society are limited. c. Resources are limited.
Economists argue that individuals have “rational self-interest.”True False True
A balanced economy generally has which economic stance?a. Expansionaryb. Contractionaryc. Neutral d. Exceptionary c. Neutral
Labor is an unlimited resource.TrueFalse False
The New York Stock Exchange is an example of what type of stock market?a. Virtualb. Distancec. Physical d. Individual c. Physical
What is the governmental allocation and collection of money within the state?a. Resource policyb. Domestic policyc. Fiscal policy d. Monetary policy c. Fiscal policy
Why do most companies sell shares of stock?a. All companies are required to sell shares of stock.b. To let more people vote on company decisions.c. To generate income for the company. d. To gain a greater reputation. c. To generate income for the company.
Entrepreneurial ability refers to the human resource of finding resources, making business decisions, and creating new products.True False True
A share of ownership in a company is known as which of the following?a. Stock b. Investmentc. Rebated. Bond a. Stock
What is a benefit of stock markets?a. They create jobs.b. They allow companies to generate income.c. They allow individuals to invest money and create more money.d. All of the above. d. All of the above.
The most common way for a government to raise money is through the collection of taxes.True False True
What should be left out of financial decisions whenever possible?a. Emotion b. Shared decision makingc. Financial plansd. All of the above a. Emotion
What is true about emotions and financial decisions?a. You should only make financial decisions when you are in a good mood.b. You should only make financial decisions when you are in a bad mood.c. You should try to leave emotions out of financial decisions.d. Emotions have no impact on financial decisions. c. You should try to leave emotions out of financial decisions.
What is an amount of money multiplied by the interest rate and the amount of time that the money will be earning interest?a. Present valueb. Future value c. Past valued. None of the above b. Future value
What is NOT one of the three primary resources that families have to reach financial goals?a. Timeb. Moneyc. Education d. Energy c. Education
Each action you might take in reaching your goal has risks or costs.TrueFalse True
About what percentage of lottery winners end up with financial troubles?a. 2 percentb. 18 percentc. 45 percentd. 70 percent d. 70 percent
The rise or fall in the price of an item is an example of which of the following?a. Inflation risk b. Personal riskc. Income riskd. Interest rate risk a. Inflation risk
Interest rate risks would be most relevant to what purchase?a. Airline ticketsb. A house c. A sweaterd. Patio furniture b. A house
Unemployment is an example of which of the following?a. Inflation riskb. Personal riskc. Income risk d. Interest risk c. Income risk
What is true about personal financial planning?a. You only need to list long-term goals.b. You don’t need a financial plan until about the age of 35.c. Your financial goals will change over time. d. All of the above c. Your financial goals will change over time.
Making financial decisions is fairly rare; most people make only a few during their lifetime.TrueFalse False
Experts recommend that you revisit your financial goals about how often?a. Every 10 to 20 yearsb. Every 2 to 5 yearsc. Every yeard. A few times a year d. A few times a year
What is the first step in financial planning?a. Analyzing the current situation b. Identifying goalsc. Coming up with strategies for meeting goalsd. Assess the advantages and disadvantages of different strategies a. Analyzing the current situation
There are two the means for achieving financial goals–you either need to increase your savings or reduce your spending.True False True
What is true about financial planning?a. Only short term goals are importantb. Once you have a plan, you shouldn’t need to revise itc. Financial plans should be reviewed regularly d. All of the above c. Financial plans should be reviewed regularly
Personal financial planning is the process of creating and achieving financial goals.True False True
What is the final step in personal financial planning?a. Setting goalsb. Reviewing and revising goalsc. Creating strategies for meeting goalsd. None of the above b. Reviewing and revising goals
As we age, the number and complexity of the financial decisions that we make increases.True False True
Reviewing your spending habits rarely provides useful information to help you reach your financial goals.TrueFalse False
A family’s resources are unlimited.TrueFalse False
What is a disadvantage of shared decision making?a. Multiple viewpointsb. Discussing the pros and cons of the decisionc. Creating a less impulsive, emotional decisiond. It can create competition between individuals who want to “win” the decision d. It can create competition between individuals who want to “win” the decision
What is an example of an inflation risk?a. A person’s income may dropb. The price of an item can rise or fall c. The rates of interest could rise or falld. A person might become ill or have another major problem arise b. The price of an item can rise or fall
Shared decision making is always a positive strategy to take.TrueFalse False
Although some families have more resources than other families, there is always a limited amount of resources that families have to work within.True False True
Our financial decisions decrease once we reach adulthood.TrueFalse False
How many government agencies does the United Kingdom have to oversee the financial industry?Selected: a. One b. Threec. Fived. Eleven a. One
Brokerage firms make their profits primarily in which of the following ways?a. Consumer depositsb. Government depositsc. Dividendsd. Fees or commissions on sales or transfers d. Fees or commissions on sales or transfers
The FDIC in the United States insures some financial accounts up to what amount?a. $10,000b. $50,000c. $100,000 d. $500,000 c. $100,000
All financial institutions offer the same products and services to consumers.TrueFalse False
Commercial banks are funded through which of the following?a. Customer deposits b. Stock holdersc. Government fundingd. Services a. Customer deposits
Savings and loans institutions put about 70 percent of their money into which of the following?a. Bondsb. Stocksc. Life insurance policiesd. Mortgages d. Mortgages
In the United States, all financial institutions are required to conduct business at a physical location only.TrueFalse False
Check cashing businesses do not require that an individual be an account holder; they will cash any valid check.True False True
All financial institutions are equally safe and beneficial to use.TrueFalse False
The government provides no oversight of financial institutions in most countries.TrueFalse False
Accounts in non-depository institutions are almost always insured by the government.TrueFalse False
Web-only financial institutions do not have which of the following?a. Checking accountsb. Savings accountsc. Interestd. Physical locations d. Physical locations
The Federal Deposit Insurance Corporation (FDIC) is an insurance agency that is supported by the government in the United States.True False True
Credit unions are non-profit organizations.True False True
What is true about credit unions?a. They are not insured by the government.b. They are generally member owned. c. They only offer savings accounts.d. All of the above are true. b. They are generally member owned.
What is true about certificates of deposit?a. They offer lower interest rates than savings account.b. They are the most liquid account available.c. The money has to remain in the account for a specified period of time. d. All of the above are true. c. The money has to remain in the account for a specified period of time.
401k accounts are those that are partially funded by employers using a portion of wages before tax.True False True
Mutual savings institutions are owned by who?a. Stock holdersb. Members of the institution c. Governmentd. All of the above b. Members of the institution
An example of a nondepository financial institution is which of the following?a. Commercial bankb. Credit unionc. Brokerage firm d. All of the above c. Brokerage firm
What is the end of the CD account time when the money can be withdrawn?a. Maturity date b. End datec. Completion dated. Withdrawal date a. Maturity date
401k accounts are what type of accounts?a. Mortgageb. Bondc. Retirement d. Education c. Retirement
Financial experts recommend that you compare at least several different financial institutions in these areas and find the one that best meets your needs.True False True
Pawnshops generally offer what type of service?a. Check cashingb. Loans on possessions c. High interest savings accountsd. Life insurance b. Loans on possessions
Mutual fund companies are what type of companies?a. Mortgageb. Investment c. Credit cardd. Insurance b. Investment
About how many tax returns are selected by the IRS for audits each year?a. Less than one percent b. Ten percentc. Twenty percentd. Twenty-five percent a. Less than one percent
Which of these is a common tax form in the United States?a. 40Bb. 1001Zc. 1040 EZ d. All of the above c. 1040 EZ
Which of the following is NOT included when calculating gross income?a. Paychecksb. Alimonyc. Investment incomed. Scholarships d. Scholarships
Estate taxes are taxes on a person’s estate when that person dies.True False True
Estimated payments are often used by individuals who are self-employed, have investments, or other income where employer withholding is not offered.True False True
The United States began collecting federal income tax in which year?a. 1776b. 1861c. 1913 d. 1955 c. 1913
Your adjusted gross income is your gross income minus specific deductions.True False True
Which type of audit occurs at your home or business?a. Field b. Officec. Correspondenced. All of the above a. Field
In the United States, only five states currently charge sales tax on purchases.TrueFalse False
In the United States, federal taxes are due on which day?a. February 28b. April 15 c. July 4d. October 1 b. April 15
Taxes are used for which of the following?a. Maintaining roadsb. Parks and public cultural sitesc. Social servicesd. All of the above d. All of the above
Which form details how much money an employer has already withheld for taxes?a. W-2 b. A-5c. T-10d. M-9 a. W-2
Preparing a tax return yourself can be less expensive, but individuals not familiar with preparing taxes may miss eligible deductions and credits.True False True
All individuals in the United States file their taxes under the same status.TrueFalse False
In the United States, federal taxes and returns are due each year on May 15.TrueFalse False
Which agency collects taxes in the United States?a. FBIb. ATFc. IRS d. CIA c. IRS
Which country use tax brackets as part of their tax system?a. Canadab. Australiac. South Africad. All of the above d. All of the above
What is a federal and/or state tax on specific goods like gasoline, tires, airfare, or cigarettes?a. Estate taxb. Income taxc. Excise taxd. Goods tax c. Excise tax
Jane is not married and has no children. She is 35 and owns her own home. Under which status is she most likely to file?a. Filing jointlyb. Single c. Head of householdd. Widow b. Single
In the United States, if someone is unable to file by the tax deadline, they can file an extension, but any taxes due must still be paid by the deadline to avoid penalties. True False True
In a progressive tax system, who pays a greater proportion of their income in taxes?a. Those with low incomesb. Those with high incomes c. Those who have the most deductionsd. Everyone pays the same b. Those with high incomes
All sources of income is also known as which of the following?a. Gross income b. Adjusted gross incomec. Taxable incomed. Whole income a. Gross income
Income tax is the only type of tax collected in most states within the United States.TrueFalse False
In the United States, it is possible for someone to give a gift up to how much money per year to another person without that money being taxed?a. $1,000b. $8,000c. $10,000d. $12,000 d. $12,000
The United States has a regressive tax system.TrueFalse False

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